M
acerich has made significant progress in reducing its debt, with about 60% of the $2 billion target already achieved. The company's third-quarter report highlights several key developments that will help it reach the finish line. Macerich is set to sell its Thousand Oaks mall, The Oaks, for $157 million, and has three other transactions underway involving Santa Monica Place in California, Shops at Atlas Park in New York, and Southridge Mall in Iowa.
Additionally, talks are ongoing with lenders or sale negotiations on four more properties, including the 2 million-square-foot Lakewood Center in Southern California. CFO Scott Kingsmore expects this property to be sold in the near term. The successful sale of The Oaks, which required a major redevelopment, indicates investor appetite for B-opportunity malls that can become A-properties with reconstruction.
CEO Jackson Hsieh views this as encouraging, noting it wasn't evident when he started at Macerich in March. Under his leadership, the company has implemented the Path Forward Plan to trim $2 billion in debt and identify centers with future potential. The plan categorizes properties into top-producing Fortress centers, stable Steady Eddy malls, and laggard Eddies for sale.
Macerich intends to aggressively pursue redevelopment plans for Los Cerritos Center, a Fortress property, while refinancing debt at Washington Square in Portland, Ore., which has potential to become a Fortress center. The company paid $122 million to buy out its partner's stake in Pacific Premier Retail Trust, allowing it to accelerate business plans on these properties. Future plans for Washington Square may include luxury tenants, and Cerritos could see multifamily development.
Macerich reported a net loss of $108.2 million in the third quarter, narrowed from a year-ago loss of $262.5 million. Total quarterly revenue rose about 1% to $220.2 million, while funds from operations were $86 million compared to $100.6 million in the same period last year. The company also announced Daniel Swanstrom II as its new chief financial officer, set to join on November 16.
